Transport Committee on Nov. 23rd, 2022

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

You'd say 50%.

[Firat Uray]

I'd say 50%. It's mostly big cities that we are trying to cover. As a private company, we need the funding to operate these routes. We would love to go to the rural areas, but we cannot do that ourselves. We will need help.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

When we had Greyhound, my understanding is that the regulations were a bit of a social contract. Greyhound was able to operate the profitable intercity routes in exchange for also operating the rural routes that lost money because, frankly, you can't make money and turn a profit delivering service in remote regions of Canada. You just can't.

Do you see this kind of social contract as part of the future of bus transport in Canada? Will private companies be given access to profitable routes in exchange for taking on the needs of rural Canada?

[Firat Uray]

Exactly, if that is possible in Canada so that we can provide more and wider services in rural areas, because right now, if you don't mind, we are competing with other companies for all of those big-city profitable routes. If we are competing, it is going to be hard for us to expand our services to different small towns.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Uray.

Thank you, Mr. Bachrach.

Next we have Mr. Muys. The floor is yours. You have five minutes.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Let me also ask some questions of Rider Express.

You talked about the fact that when you filled the void left by STC for the first few years until the pandemic, you were able to operate without any funding or public support. What has changed since 2020 in terms of the routes you're offering? When do you think you could be back to a point where that might be the case, or is that not going to ever happen at this point?

[Firat Uray]

It's definitely not going to happen that we can cover as much as Greyhound used to cover. As I said, currently we are providing these services to close to 60 cities. There are still some routes that are not making money that we are providing for from the other routes that are making money. We're using those routes to keep those services up and running.

What we provide is a connection service. Let's say that one route doesn't make money; if you cut that route, the connection is not going to happen. Our business style is to rely on connecting people, connecting cities and connecting each other. That creates enough volume of passengers so that we can operate.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Thank you.

For Ontario Northland, I think you mentioned you're in an 80% cost recovery level. I think, if I heard correctly, there's an optimal cost. There's probably a price point after which you're going to have a decline in ridership, so you've probably mapped that out.

Is that sustainable into the future? Has that changed since prepandemic times? What does that look like?

[Tracy MacPhee]

Based on my experience and what I witnessed through the previous years prior to COVID, up to now, it's not flexible to change it significantly. If we were to do a 10% increase, that's detrimental to passengers who are trying to take the bus service.

There is very little appetite to be able to increase the fares to a point that we would cover our cost, because at that point we would lose people who are relying on our service and who have no other option to take any other transportation across the country.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

I have another question, and I think it was alluded to. It's about bus parcel express. I remember using this in the nineties to get stuff from Toronto to Ottawa. You could do stuff within a five-hour time frame versus overnight couriers.

How many people are getting Amazon deliveries at their doorstep? There's a big uptick in parcels.

Is that a potential future revenue stream, or are there other potential future revenue streams—whether for Northland or the folks from Rider Express—that can help contribute to the business model?

[Tracy MacPhee]

I think the biggest challenge we see in trying to connect parcels is not within our own network, but to other carriers. We don't have appropriate locations to switch off parcels. In Ottawa, for example, we don't physically have a location where we can leave parcels to send them across to Quebec to connect with Maritime Bus. That was a huge loss of business. It's not so much in our region that the parcels we're carrying within our own territory are not enough to sustain the operations; we need to be able to connect with other carriers.

As I mentioned in my submission, if we don't have these locations to do that, we can't be doing it on the side of a highway. It's not safe.

We don't have the capacity to do that.

[Firat Uray]

Location is the biggest problem for us, and it's an expensive overhead for us. The one thing the federal government or provincial governments can help us with is to create a safe location for passengers and also for parcels.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Do I have time for one more question?

[The Chair, Liberal, Peter Schiefke]

You have one more minute, Mr. Muys.

[Dan Muys, Conservative, Flamborough—Glanbrook, ON]

Okay.

Some years ago, when I lived in Calgary, there was the Red Arrow, and I think it existed in other parts of the country as well. Mr. Chahal may know. At least my view of it is that they offered a higher-end service from downtown Calgary to downtown Edmonton that competed with air traffic. It was often a better option than flying, in terms of both cost and comfort.

Is that a potential opportunity, given the mess at airports these days, whether in northern Ontario, in Saskatchewan, or in other parts of the country where that might exist?

[Marco D'Angelo]

I think it's really good news that Red Arrow services are coming to Ontario as well, to help supplement bus service there. There are also other examples of businesses in the United States that are providing more comfortable services, such as an overnight service that provides some sort of bedding. A recent piece in The New York Times did a survey of going from Atlanta to Washington, D.C.

There are opportunities out there. It's about creating the value proposition, but that may involve subsidizing those routes and looking at really creative options, because a lot is possible.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. D'Angelo, and thank you, Mr. Muys.

Next we have Mr. Rogers.

Mr. Rogers, the floor is yours. You have five minutes.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Mr. Chair, and thank you to all the witnesses who are with us today. Welcome. I particularly enjoyed your testimony.

We do know, of course, that busing and other forms of transportation faced major challenges due to COVID-19 and other complications that arose from that.

Mr. Accardi, first of all, and maybe Mr. Johnson, I want you to comment on some specific needs in Atlantic Canada, because I know that the only bus line in the province of Newfoundland and Labrador that goes from Port aux Basques to St. John's is DRL. It's a family-owned business. It's private sector. I met with them on two or three occasions during the COVID-19 period, and they were having some significant challenges. However, there were a number of disputes, which may not be the right word, or differences of opinion as to who was responsible to support these folks, and whether it was federal or provincial responsibility.

You mentioned regional transit, Mr. D'Angelo. I'm wondering, from a regional perspective, how you would see Atlantic Canada. Is the situation there fundamentally different from all the regions of the country?

[Marco D'Angelo]

I can certainly talk to you about work that we've done in New Brunswick in trying to secure operating funding so that systems could grow outside the urban areas. I'm thinking about Miramichi, Saint John, Fredericton. They've been working to expand their service, but they've been finding difficulties in partnering with the Government of New Brunswick, so that's made it a little bit difficult.

In other cities in Atlantic Canada, St. John's is expanding their service. They're back to full ridership, as I'm happy to report as well. Halifax Transit is also looking at connecting. It's fully within HRM, but also a little bit outside the Halifax Regional Municipality as well. We have a good-news story, I think, in growth, in terms of what's happening in Cape Breton and the transit service there.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

The question is this: Is there a way of connecting all these different providers in some kind of a regional system?

[Marco D'Angelo]

I think there are lots of technological opportunities that exist out there that can connect them. It's a matter of creating the economic argument to do that. That would be an opportunity in terms of innovation. The federal government could step in and look at innovative solutions whereby technology providers could help to connect existing carriers in regions.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

That's interesting.

Mr. Johnson, do you want to comment on that?

[Terence Johnson]

Yes, I would.

DRL is a kind of unique situation, because the bus line actually replaced the Newfoundland railway. It was previously operated by CN. There is kind of a responsibility to keep that running that is separate from the other responsibilities in the network.

For example, if I wanted to go from Corner Brook in Newfoundland to Hay River today, I could do it, but it would usually be complicated and there would be a lot of different tickets. I can't even get a ticket that takes me on VIA Rail, Marine Atlantic and then Maritime Bus to go to Moncton. This is where the idea of a national clearing house is absolutely essential.

You'll find that companies like BusBud that are trying to do this want a cut as brokers. A lot of the bus companies I've spoken to don't have 10% to give a broker. That's why it has to be a non-profit, national clearing house that is operator-agnostic and that everybody can work with. That's where the federal government can really have a role. It's in creating that by working with Motor Coach Canada and with players across the industry.

What does this need to look like to support the industry rather than to take money from it?

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you very much.

Mr. Accardi, would you like to comment on that as well?

[Vince Accardi]

I believe the committee has invited Coach Canada to come, and I think Michael Cassidy is coming next week.

I agree. I think there's an opportunity for the federal government to take a leadership position through innovation and other mechanisms to help fast-forward what will likely happen and to help reconnect those communities that are currently without service.